November's data reflect significant progress in the recovery path compared to October when 92% of 2019 levels were reached. LAC's figures exceed those of North America, which was at 92% of its 2019 levels, the Middle East at 88%, Europe at 81%, Africa at 80%, and Southeast Asia, the region with the least recovery, with 74%.
In terms of international passenger traffic, the Dominican Republic, Colombia, and Mexico were again at the forefront of the recovery in LAC with 22%, 17%, and 11% growth, respectively. Chile and Argentina reached 89% and 78% of their 2019 levels, respectively.
In terms of domestic traffic, Colombia and Mexico achieved outstanding growth exceeding their 2019 levels by 13%. Argentina advanced with 97%, and Chile with 96% of its pre-pandemic levels. Domestic RPKs showed the most robust recovery, with 2.9% above their 2019 levels.
The challenge
According to the IMF, the weight of food in the consumption basket, which has been significantly affected by inflation, represents 25% of the basket, so the resources allocated to travel may likely be reduced in this scenario of economic contraction.
"At the operational level, the reduction in global economic growth expectations, high inflation rates, devaluation of the region's currencies against the dollar, a very high cost of the main input to provide air transport services, which is fuel, among other aspects, have a significant impact," said José Ricardo Botelho, Executive Director and CEO of ALTA.
In 2022, fuel prices remained historically high. On December 27, the cost of jet fuel reached 138% above January 2021, while the price of West Texas Intermediate (WTI) crude oil reached 79%. This rise has impacted the weight of the input in the airlines' cost structure, from 28% a year ago to almost 50% in Q3 2022.
Although down in recent months versus its peak of US0 (April 29, 2022), at US8 (December 26), it represented 50% more than in December 2021, Botelho stresses.
"2023 has its challenges. The potential drop in demand for air transport services originated from an economic recession, mixed with economic challenges for the operation, especially inflation, devaluation, and high costs, which may be barriers to the recovery of this industry that in 2022 lost US$ 2 billion in LAC. 2023 is a year of challenges, yes, but also of immense opportunities. We have the opportune occasion to strengthen the articulated work between authorities and industry in favor of the passenger and an industry that generates development. Together we fly higher!" remarked ALTA's Executive Director.
Tags: ALTA
